GM earned $3.77B in 2013; profit sharing up to $7,500
GM earned $3.77B in 2013; profit sharing up to $7,500
Wed, Feb 5
General Motors Co. said Thursday it earned $3.77 billion in 2013. General Motors CEO Mary Barra took charge of the company last month. (Paul Sancya / AP)
General Motors Co. said Thursday it earned $3.77 billion in 2013, down 22.4 percent from its net income in 2012. The company said its operating performance improved during the year, but higher incremental tax expenses and special items related to restructuring the business in 2013 that totaled $2.4 billion drove down earnings.
The Detroit automaker said it earned $913 million in the fourth quarter , up slightly from $892 million in the period in 2012. The company’s 2013 fourth-quarter earnings per were 57 cents, or 67 cents when factoring special items that cost the company about $200 million or 10 cents a share. That figure was still below analyst expectations in the quarter for 87 cents a share. GM Chief Financial Officer Chuck Stevens thinks analysts missed factoring in restructuring costs related to closing its Bochum plant in Germany this year and because GM had a higher tax rate.
GM’s had earnings per share of 54 cents in the three-month period in 2012. That figure included 6 cents a share attributed to a special gain, dropping earnings per share to 48 cents.
The company’s results in North America were strong in 2013, as the company said its yearly adjusted pretax earnings were best-ever at $7.46 billion, up from $6.47 billion in 2012. Stevens said new vehicles such as the 2014 Chevrolet Silverado, which is commanding higher selling prices, aided results.
With the improvement, GM also announced profit-sharing checks of up to $7,500 for 48,500 eligible U.S. employees. Checks are scheduled to go out to employees in March. Last year, GM paid about 49,000 eligible U.S. hourly employees up to $6,750.
Revenue jumped 2 percent in 2013 to $155.4 billion and GM’s adjusted earnings before interest and taxes for 2013 totaled $8.6 billion, up from $7.9 billion in 2012. Fourth-quarter 2013 adjusted earnings before interest and taxes also totaled $1.9 billion, up from $1.2 billion in fourth-quarter 2012.
“Launches of some of the best vehicles in our history combined with significant improvements in our core business led to a solid year,” GM CEO Mary Barra said in a statement. “The tough decisions made during the year further strengthen our operations. We’re now in execution mode and our sole focus will be delivering results on a global basis.”
GM trimmed pretax losses in Europe in 2013 to $844 million, including a loss of $345 million in the fourth quarter. The total 2013 losses are down from $1.94 billion in 2012. Stevens said GM has seen improvement in the European sales market and GM’s revenue rose in the second half of the year.
“With the cost actions that we’ve taken and an improving market, we feel very good about our mid-decade objective of breaking even (in Europe),” Stevens said.
The company also posted 2013 profits in its International Operations, South America region and GM Financial. The company’s 2013 International Operations earnings, which includes its biggest sales market in China, fell to $1.23 billion pretax, from $2.53 billion pretax in 2012. Fourth-quarter International Operations earnings fell to $208 million pretax from $676 million in the 2012 quarter.
Stevens said the company is seeing a general weakness across international regions. In some markets the problem is foreign exchange; in other, it’s pricing because of a weaker yen. Without China results, GM would have lost money in its International Operations region during the fourth quarter.
In December, GM announced it would stop selling most Chevrolet models in Europe by the end of 2015 and would stop making vehicles in Australia by 2017.
“Those two actions will build a much stronger foundation going forward for improved earnings in IO,” Stevens told reporters Thursday. “But there’s a number of actions that we’re going to have to continue to take to drive improved performance in IO.”
Fourth-quarter profits in South America also were down to $27 million pretax, from $135 million pretax in the 2012 quarter. Stevens said the company continues to face challenges in Venezuela and that the risk in South America has “increased significantly over the last several weeks” with currency devaluation issues in Argentina and economic problems in Venezuelathat has led to the company idling its plant there.
“Venezuela, we’re fundamentally shut down right now until we can get some resolution on currency controls,” Stevens said.
Stevens said GM’s 2014 first quarter profits will be lower than typical due to more restructuring costs, higher marketing expenses, sales volume reductions in the Middle East related to launching SUVs and ongoing issues in South America.
GM is the last of the Detroit-area automakers to post 2013 earnings. Last week, Ford Motor Co. said it earned $7.2 billion last year, up about 26 percent from 2012. In the fourth quarter, the Dearborn automaker earned $3 billion, up from $1.6 billion in the same quarter in 2012.
Ford hourly workers will receive profit-sharing checks of about $8,800, the highest per-worker amount ever awarded. Ford paid about $8,300 to factory workers last year.
Chrysler Group LLC last week said it made $1.8 billion in 2013, up 9 percent, which helped parent company Fiat SpA earn 1.95 billion euros ($2.67 billion) in 2013. For the fourth quarter, Chrysler earned $659 million, while Fiat had net income of almost 1.3 billion euros ($1.77 billion). Last week, Fiat announced the merged company will operate as Fiat Chrysler Automobiles.
U.S. hourly workers for Chrysler also are slated to receive profit-sharing checks of about $2,500 each. Last year, workers got $2,250 in profit-sharing.